eCommerce Growth in Africa

eCommerce Growth in Africa

After traveling on business to the U.S., Canada, U.K. and other parts of Europe, as well as the UAE, in the last few months the topic of opportunities and eCommerce in emerging markets was brought up often. ECommerce in Africa was a major theme that kept coming up over and over again. As part of our global eCommerce series I wanted to dig a little deeper into eCommerce on the African continent and what the growth potential will indeed be in the coming years.

A recent article in Business Day’s BDlive further caught my interest on what is on the eCommerce horizon for this part of the world. According to the article, Google South Africa was expecting strong growth for the remainder of 2015 and the following year. When Luke Mckend, country director for Google SA, spoke at the eCommerce Africa Confex in Cape Town earlier this year he shared some statistics that showed an increase of googling which typically indicates an intention to buy. “A story of growth” as Mckend called it, and data that clearly outlined that search was growing significantly faster in Africa than in more mature online economies

The numbers were quite impressive: the query volume in South Africa increased by 37%, 49% in Nigeria followed by 33% in the country of Kenya.

eCommerce Sector: Winners and Losers

Africa’s eCommerce sector is gaining more momentum in a growing number of countries. I wanted to see who the winners and losers will be in the near future and learn more about those trends. Russell Southwood from www.allafrica.com used the telecoms and internet sectors as examples to provide an in-depth overview in a recent article he wrote on the site.

The main investors in Africa’s eCommerce sector according to Southwood are:

African Internet Group

Naspers (co-investors with Kinnevik in Nigeria’s Konga)

Ringier (Swiss-owned)

Casino (French owned and popular in Cameroon and Cote d’Ivoire)

One Media Africa

There is also more regional competition such as Bid or Buy operating out of South Africa and souq.com, operating out of the Middle East with a considerable presence in Egypt.

The largest among them is most likely Africa Internet Group and is represented in 23 African countries employing around 5,000 people. It has a varied portfolio of companies that includes Jumia (which is known as Zando in South Africa), Kaymu, Easy Taxi, and hellofood, just to name a few.

Africa’s Top Countries for eCommerce

The leading countries of Africa’s eCommerce landscape include Tanzania, Kenya, Egypt, Morocco, Ghana, and Nigeria, but according to Africa Internet Group’s Managing Director Sacha Poignonnec, a surprising uptick can be seen in countries such as Cote d’Ivoire and Uganda.

Typically investors accept a certain level of difficulty as part of doing business in bigger countries because the markets are large and lucrative such as Ethiopia, Angola and Nigeria. But smaller countries are at a distinct disadvantage and have to make up for the lack of size by making it easier for investors to operate in their countries.

For example, Kenya, Senegal and Zambia get high scores for their ease of completing the business start-up process. Tanzania, even though an obvious investment target, is known for not making it easy to do business there and this may hinder further rapid growth.

Africa’s eCommerce: Niche markets

Source: paymentsafrica.com

Using South Africa as an example, Mckend analyzed data about search with the intent to buy and concluded that although the query growth stood at 37% between 2013 and 2014, the commercial intent query base had grown by 55% which indicates a level of maturity with buying online that was not apparent a few short years back. He witnessed something similar in Nigeria where the searches for purchases increased by 39%.

When the market matures there is space for niche industries to take a foothold. Two trends that Mckend identified as particularly unique in South Africa’s e-commerce territory are what he called the recent “sock wars” with two major sock e-retailers fighting for market share, and NetFlorist who is in the market of selling fresh flowers. He concluded “Who imagines there’s enough volume in the local online environment that there can be such a niche service? All of this change and experimentation is important to see how big the market is.”

According to the same article, Google is now witnessing the massive increases in queries seen on a global scale in South Africa and Africa as a whole. The trend of “just shopping” with virtually no difference in on or offline mirrors what we have already seen happening with the international partners. However it also has to be noted that business in general needs to still focus more on their online presence and that the questions of online payment options still remain unanswered or are not being addressed adequately at times.

Overall the outlook is still positive and the prediction of a significant market surge by 2017 remains in effect.

Summary

As more and more African countries get connected to the internet, technological innovations will continue to open doors and provide new opportunities for eCommerce on the continent. The prospect of it happening in this decade is both fascinating and exciting. We will be watching the growing trends carefully and updating our readers regularly on what that means for global eTailers.

Resources on Translation Service for eCommerce Companies

Globalization Partners International (GPI) has provided language translation services to eCommerce clients worldwide. In addition, GPI has developed a user-friendly Translation Services Portal that makes it extremely easy for non-technical users in the eCommerce arena to manage website, catalog and other eCommerce content translations projects.

Further GPI Resources on Country Specific

Globalization Partners International (GPI) frequently assists customers with multilingual website design, development and deployment, and has developed a suite of globalization tools to help you achieve your multilingual website localization project goals. You can explore them under the Translation tools and Portals section of our website. You may also find some of the following articles and links useful:

For more information or help with your next website translation project, please do not hesitate to contact us via e-mail at info@globalizationpartners.com, or by phone at (866) 272-5874, or by requesting a free web translation quote on your next website translation project.

Peter Betts

Director, Global Accounts

Peter has over 20 years’ experience in business development within the localization industry supporting clients for documentation, software and website globalization services. He started his career in the translation industry in 1995 and over the years has worked for several leading localization service providers including LMI, Berlitz, Welocalize, GPI and Beyondsoft. Throughout his career Peter has led by example and always put his clients’ needs first to ensure client expectations are understood and successfully met. Over the years Peter has trained extensively in Solution Selling, Action Selling and Localization Sales, Testing and Project Management. Peter handles many of GPI’s global accounts helping educate clients on GPI’s comprehensive suite of globalization services and industry best practices.